Keys to the Market

Christian (00:01.87)
Hey everybody, welcome to the show where we interview the nation’s leading real estate entrepreneurs. I am here with Michael and today we’re going to talk about real estate, everything related as far as investing, commercial real estate. And he has a ton of other topics that I feel are going to be very, very valuable to all of you. Without further ado, before we kick that off though, at Investor Fuel, we help real estate investors, service providers, and real estate entrepreneurs, two to five X their businesses.

to allow them to build the businesses they’ve always wanted and to allow them to live the lives they’ve always dreamed of. Now let’s kick it off guys. Michael, welcome to the show. I’m excited to talk about everything. You and I just spent about 10 minutes just speaking about your experience for over 40 years. And I’m really, really interested to hear a lot about the stuff that you have experience on. So before we get started, how about you just share a little bit more about yourself and how you got here.

Michael Saragusa (01:01.982)
Sure. I was invited to go ahead and join the podcast. I’ve got over 40 years experience in finance, business development, operations, and investment. Everything from stock, bonds, market, to real estate. Currently, we’re working on several projects. We’re in the process of purchasing 40 % of an international business.

We’re developing four venues within the United States right now for… with names that people would know. I can’t release information regarding that right now, but they’re going to be entertainment venues. We own the rights to Game of Thrones, things such as that. And then we also have a major development down out of Phoenix.

that’s gonna be a little over a billion dollars that includes a stadium for an MLS team that my partner currently purchased. That’s gonna be moved down there. So it’s gonna be a full economic development with everything from entertainment to housing to got about 500 acres down there that we’re gonna be developing. So there’s a lot of things in the works. Worked with people from everything from single family all the way up through commercial.

The only market that I’m a little confused on right now is really the office space area and really it comes down to cost in that particular case because the to me the only thing I can see a value is to have the office space in the area around it and develop a community around it and redevelop it into mixed use with housing as well as retail

There’s just not enough people going to be going back to offices. Same reason all your people are here now. They want to figure out a way to get out of the rat race, how to take care of themselves and their family and do better than what somebody’s going to pay them.

Christian (03:03.31)
That is so true. I cannot agree anymore. So Michael, mean, that’s incredible for all the accolades and everything that you’re currently doing right now, but I’m really interested to know how did you even get started in this years ago? What got you in the door?

Michael Saragusa (03:18.265)
Well, at 19 years old, I started my own commercial finance company. And obviously at 19 years old, I’m getting all the stuff that, which long before internet for everybody, I’m sure most of your people are more familiar with that, where you went into phone books, you had to contact people, do all these types of things. So everything was built through relationships, which is the most important thing you can do.

I don’t care how you’re getting a lead is nothing more than a name and a phone number. What you do with it after that is based off your knowledge and how you develop the relationship with the person you’re dealing with. So, let’s start as commercial went into more of advisory from that because a lot of the people that you’re dealing with didn’t qualify for the financing they were looking for. So at 19 years old, I was going into on 60 year old business owners.

this is what they needed to do for their business in order to qualify for the lending. And then found that, you know, probably 70, 80 % of those situations actually created more profits for them that they didn’t even need what their initial loan was going to be for. We created that through profit for the business and then financed them for larger loans to grow the business after the fact. So, and then just it grew from that. mean,

You get opportunities for other people. I got in real estate through opportunities that other people are providing.

financing I could do this I could do the different things that were needed and then through my operations background they would want me to be involved in the project on a different level so once again everything is about relationship guys it’s not about the asset the asset is what you use to maximize profits to make money to do all those things but if every party is not being served then you don’t have a good deal

Christian (05:15.693)
So when you say a good deal, Michael, I mean, how can someone identify a good deal, right? Even a beginner.

Michael Saragusa (05:18.0)
Keep.

Michael Saragusa (05:22.703)
There has to be a benefit to every party involved. if I’m going to, if I’m wholesaling, I have to give my seller a good price for what it is that they’re looking for. This solves whatever problem they’re trying, whether it’s they inherited the property, they don’t want the expense, whether it’s I need to have a minimum amount to pay my loan off. What’s the reason? A motivated seller is not a motivated seller. Motivated seller is motivated seller at the right price.

what’s the right price and why. And then I need to make something out of the deal, I’m not gonna work for free. And then my buyer has to be satisfied with what he gets in the end.

So there’s not a good deal unless all three parties are happy in the end. Doesn’t mean they have to be 100 % happy, but they all have to have a benefit from the transaction that’s taking place. If you’re a middle guy, you’re a transaction coordinator. That’s what you do. And your job is to make sure that everybody on each side of the transaction is happy when the deal is done.

Christian (06:29.325)
I love that. I love that. So how can someone get good at negotiations? Right? How does someone build leverage and how does someone communicate that in a proper way?

Michael Saragusa (06:38.901)
It’s not just about, well first of all, you have to explain to the person that you’re talking to that you’re trying to buy at. If you’re not buying at a discount, why are you buying at discount? What is it that you do? People are afraid to tell people what they do and how they get paid. I’ll tell people what I’m gonna get paid. I’m okay with that. Either I’m worth it or I’m not. So the real question is, can I help you with your problem? If I can help you with your problem,

then you shouldn’t care what I mean.

I solved your problem. I get paid for solving your problem.

Christian (07:14.125)
It’s a win-win for both parties.

Michael Saragusa (07:16.107)
Right, so when you start, it has to start with you having enough knowledge to give them a reason to work with you. Once you’ve given them the knowledge of what their situation is, how you can help them, what that’s going to look like, now they can start negotiating. Because now they understand what the negotiation is about. Too many people want to just start negotiating. But you’re negotiating with an uneducated person that’s never done what you’re asking them to do.

Christian (07:18.765)
Thank

Christian (07:23.085)
Mm.

Michael Saragusa (07:49.632)
How do you temper their expectations?

Christian (07:53.069)
Do you believe that what you’ve learned in your experience so far, the active listening is the most crucial part in that?

Michael Saragusa (08:02.027)
It is, but asking the right questions is just as important. So it is, you ask the questions and you get the right answers. And when there’s discrepancy and what they think and what the reality is, you have to be willing to step up and be direct about those things. Because otherwise, why are you gonna spend an hour on a phone with somebody on a deal that’s never gonna happen?

Christian (08:04.341)
Right.

Christian (08:27.742)
Mm-hmm.

Michael Saragusa (08:29.439)
Here’s the circumstances, this is what we can do. Is that acceptable to you? I ask people all the time, are you okay with that?

If they’re not okay with it, then either I have to be willing to make a change in what my expectations are.

Michael Saragusa (08:47.077)
or I have to end the deal.

Michael Saragusa (08:53.459)
And then the second part of that is, what’s the end result for each party when things are done?

Christian (08:59.725)
I love that Michael. mean that is that that’s I couldn’t agree with that anymore I’m interested to know you know, how did you learn all of these things? I mean throughout your experience I’m sure you put in so much time and reps and You know made mistakes along the journey. I mean, that’s obviously a given right, but how did you Know you’re fine, how did you how did you learn this? I mean, how did you how does someone get good at?

Michael Saragusa (09:17.822)
A lot of mistakes. The first mistake I made. Go ahead, I’m sorry. Go ahead.

Christian (09:30.273)
How can someone do what you’ve done? This is my question.

Michael Saragusa (09:32.81)
You start by, it really starts with, and this is the simple thing, people ignore the simple and make everything complicated and it’s all about results. If you do something of value, you’re going to get a result. Stop worrying about, I need to make, I’m gonna make $30,000 from this deal. Now I’m gonna put $30,000 into the deal, if something happens in the middle of it, I’m gonna take it out of line because I’m the transaction coordinator.

I’ll take less to get a deal done and just keep the deal moving. That way I don’t have either party on either side going, well, I’m not going to do this anymore. And then it’s all about, once again, the people. Focus on the people that you’re dealing with. Focus on their problems, not what my problem is of making money. Focus on those things through what you do. And that’s, I’m just…

I’ve been told I’m extremely different. And I like that. Some people call me crazy. I’m okay with that. Business is still about people. And everybody’s trying to automate. They’re trying to get away from this. The further away you get from that, the less money you’re gonna make, I can promise you. Because automation gets you in front of people. That should be the purpose.

Christian (10:38.433)
wants to be normal, right?

Christian (10:52.545)
Why do you say that?

Michael Saragusa (10:59.281)
That should, it should also be a way of gaining knowledge and information. It’s never going to take away the negotiating position that you’re going to need to be in, which is people and solving problems. If you solve problems, you make money. The more problems you solve, the more money you make. The bigger projects you’re involved that you’re solving a problem in, the more money you make. So learning to scale your business.

is just as important as building the business to begin with. But that’s the other mistake that people make. They don’t really truly have a business. They’re trying to go out and get their first house. Do this. You need to understand where your goals are, what you need, and how to take advantage of the opportunities that are in front of you every day when you do what you do, regardless of what it is you do.

Christian (11:52.215)
So take an audit and take accountability on that is important as well, right? You always have to know where you are and where you’re going. And I think that’s important to where a lot of people make that mistake where they don’t take that time to have that self-reflection. And it ends up costing you a lot more because you’re trying to rush and get into the game and build Rome in a day, right? And it’s, you have to have delayed gratification. That’s always been my belief as well, right? But it’s, but I’m interested.

Michael Saragusa (12:19.974)
Oh absolutely and that is something everybody wants it yesterday they want it they’re starting what they’re doing and they think okay one just one deal is what I need no you need a business that’s going to support you for your next deal and the deal after that one and then how are you going to do that how are you going to track what you do who who else do you need involved if I’m going to buy and hold if I’m going to flip all the different things that you’re looking at to build building your relationships with the right contractors how

How far can they expand with you if I buy one house, three houses, or five houses? Because if I buy five houses, I don’t want to sit on five houses. I don’t want to get them renovated one at a time. I got money out there that is costing me money to finish those homes up and getting people in there. I don’t start making money until they’re done. There’s a timeline that you have to understand that takes place with every transaction that you do. You got to be accepting of

Christian (13:16.525)
Right. I love that. Michael, where do you see the real estate industry going right now? I mean, obviously there’s so much talks about, you know, it’s not a good time to buy a home right now. It’s not a good time to invest. There’s so much noise. What are your thoughts on that right now? Do you agree or disagree?

Michael Saragusa (13:36.564)
It’s always a good time to invest and there’s still more millionaires made from real estate than anything else out there. I mean, that part is always going to be true. The problem that you’re going to have on the low end of the market right now in single family, things like that, is just so saturated. There’s so many people trying to get involved, trying to do it, but they’re not being educated properly to handle what they’re doing. So they’re mispricing what they do. They can’t resell what they do.

Christian (13:38.061)
Hmm.

Michael Saragusa (14:06.691)
They’re getting contracts. So you think once they have a contract, they finished what they need to do. You got to have two sides of the transaction for anybody to make money. So meeting the needs of the people on everybody that you’re doing. But once again, and a lot of times it comes down to what we talked about, having a business model to support what you’re doing.

So my honest opinion is you can still make a lot of money in it. You need to get your basic education. That’s where single family stuff comes in. So at least you start understanding markets. You start understanding how money flows through a real estate transaction. But the faster you expand what it is you do so that every person you talk to is an opportunity because

You’ve got a market out there right now where so many homes that should be able to be bought right now can’t be bought because they’re being mispriced and that’s gonna end. It’s actually taking those homes out of market to where nobody can buy them because the expectation is unrealistic. Overall real estate is always going to be a good market. The problem is the only ones that are going to make money in it are going to be the people that

truly understand all the steps that are involved, get the education that they need in order to actually do what they need to do, and understand one way or another, you’re going to pay for your education. You’re going to pay for it either in the money you put out to drive business to yourself, to set up the operations that you need in order to be able to scale that at a later date, or you’re going to pay for it in a lot of mistakes, or you’re going to pay for it in time.

Michael Saragusa (16:01.835)
But you’re going to pay something for the education you get. Everybody’s going to get a different education. And the places where you gain that education and the people you can trust to give that to you is the most important part. Once again, it comes back to people.

Christian (16:18.401)
Right. People over everything, right? And the rest will come from that. That’s the foundation, essentially, right? Michael, you have a lot of experience too in commercial. You and I were talking about that as well. Can someone get involved in commercial before anything, right? Even if they didn’t have experience in residential.

Michael Saragusa (16:21.226)
Bye.

Michael Saragusa (16:24.85)
Absolutely.

Michael Saragusa (16:36.957)
absolutely. mean, if you

Michael Saragusa (16:42.504)
Yes, they are two different types of markets. You need to understand the type of property that you’re looking at. There’s a few different ways you can do it. You can either, if you’re going to buy yourself, you need to understand how to value those properties and they’re different. And you also need to understand who the sellers are. Cause one of the big things in commercial that’s starting to transition a little bit right now, but wasn’t there before.

is there were a lot of commercial properties available, but the owners of those properties were so deep into those properties that you couldn’t, they wanted retail prices, period. End of story. And these are people that, lot of these people were about ready to be foreclosed on. So you gotta be a little more strategic on the commercial side, but…

If you get the right property at the right deal, I don’t care if it’s a hotel, if it’s a large apartment complex, apartment, high-rise, whatever, there are a lot of really good deals out there. Now, they will take a little longer to find the proper buyer or to get in the right network to be able to get those bought. But…

They’ll be more available. The question is, can you get it at the right price under the right terms? Are you going to buy and hold it? People don’t understand. There are a lot more opportunities to buy and hold things right now than there is to wholesale, because that’s where the money is. Because there’s just not enough spreads in a lot of instances, especially the way people are pricing things right now.

Christian (18:32.429)
Mm.

Michael Saragusa (18:36.704)
And just always remember, how does money flow through a transaction? That’s how money’s made. And it’s not about what price can I get and who will buy at this, unless you’re only gonna wholesale them.

Michael Saragusa (18:53.711)
And then everything is all about pricing it properly. Getting the right buy price so that I can get a seller that will actually purchase. But then you gotta have a market for that. You gotta know who those people are. So if you’re gonna get into anything, I don’t care if it’s single family, commercial, land development, it doesn’t matter. Know who the players are in those markets and start developing your relationships.

before you invest time and money into doing those things so that you know who you’re going to contact and get a feel for what they were when I first started doing the commercial lending. I didn’t know anything really about it. I just, I reached out to some lenders and said, hey, I’m kind of new to this. I know about finance. These are the things I do know. I was looking at the programs that you have. think I can do something with this. Will you work with me? And they knew I was green coming in. So when I asked questions, they didn’t treat me like I was stupid.

They answered my questions. then eventually, with three of the people that we had, they were doing, I was doing a lot of fleet leasing, things like that for companies. I went to them and said they were buying down to deep credits for these fleet deals. I said, why can’t we do this for individuals? Went to three of my people, worked together on program, figured out a way that would work, how to reduce risk.

and put together probably what was the first hard money lending or buy now pay here type thing, went to Rick Hendrick and he put it in his dealerships. We released it through them first. That was one in every corner. So I don’t know. mean, you just got to understand what you’re doing. Look where the opportunities are. Every person you talk to, there’s something there. Either somebody else say no if you can’t come to terms with them, whatever.

Christian (20:41.495)
Mm.

Christian (20:45.858)
Yeah.

Michael Saragusa (20:50.724)
But people don’t know how to ask for referrals. They’re afraid to ask for referrals. Hey, you know, it doesn’t sound like we’re get together on what we need here. You know somebody else or do you have more? Simple questions. Do you have more properties?

Christian (20:55.917)
Mm.

Michael Saragusa (21:09.465)
You know, I mean, hey, somebody’s buying properties. Hey, feel like partnering on something? I mean, what exactly are you looking for? I’ll go out and I’ll find. Target what you’re doing, specific. Everybody’s doing something. Find out what they’re doing. It doesn’t matter what I’m doing, because guess what? I’ll do whatever I need to to satisfy somebody else. If that’s a market I can make money in and it’s going to work. What are you doing? Tell me what you do.

Christian (21:30.669)
That’s right.

Michael Saragusa (21:38.7)
Don’t worry about it. I do whatever you need. Tell me what you need.

Christian (21:41.965)
Right, right. It’s providing value and over delivering, right? And that’s the thing. It’s the biggest thing. It’s like, you’ll never know anything in life if you don’t ask the question, right? There is no dumb question. The dumbest thing you could do is not ask a question, right? I learned that from my father long time ago and it was a very humbling experience, but it definitely does set the foundation for building confidence to go speak to somebody that is a complete stranger. And next thing you know, that’s your biggest asset.

is your relationships with the people that you have, right?

Michael Saragusa (22:13.344)
Yeah. It’s always asked them, hey, what do you do? I don’t even start on the property when I’m talking to somebody. I find out about that. You know, I mean, hey, what’s situation? What are you looking at? Somebody comes to me with a property. Tell me a little bit about it. Tell me a little bit about what you’re thinking about it. And let’s see if we can make some, because a lot of times you’ve got to change whatever the perception is.

Christian (22:17.634)
Right.

Christian (22:22.221)
It’s a conversation, right?

Christian (22:29.792)
now.

Christian (22:39.084)
Mm-hmm.

Michael Saragusa (22:39.571)
Or maybe if you have enough experience, you can show them a better way of doing what they’re trying to do. And maybe there’s actually even more money in it for you and them.

Christian (22:48.013)
There you go. There you go. That is, Michael, that was so good. I wanted to ask you another question too, on, know you have a partner you mentioned as well, but do you feel like a lot of people need a partner in business when they first get started? And then also, what do you look for in a partner today? What makes you want to partner with somebody?

Michael Saragusa (23:10.442)
Well, what’s, yeah, the partner that I have actually was a weird deal because we both were working with an ex-pro athlete. Now he actually owns a company that works exclusively with pro athletes. It helped them learn to invest, things like that. So we participate in a lot of different things. We have separate companies and then we also participate together a lot. We brought different things to the table.

He is, we have direct involvement with all four major sports leagues. He does a lot of those types of things. I’m done traveling for a while. I didn’t all of that early in my career. He’s significantly younger than me. But he was a physician for the San Francisco 49ers. He has a lot of things. He has the contacts. I have the business knowledge and the operations knowledge.

to evaluate deals to see if there’s something we want to get involved in and then how to do it. So find people that do what you don’t. That’s how you make a good partnership. You bring value to what they do that helps everybody else and then they bring something that you don’t have or something that you maybe could build over time, but they have now. And then that expands everybody’s.

Christian (24:18.541)
Mm.

Michael Saragusa (24:36.402)
realm of what they’re able to do.

Christian (24:39.575)
I love that. So how do you build trust in that though? How do you build trust in a partnership? Is it through experience? Is it through?

Michael Saragusa (24:46.716)
No one what you need to know.

No, it starts with, if you don’t know something, tell people I don’t know, but I’ll find out. Don’t ever, because guess what? The other person on the other side of the line, when you tell them something, oh, you know, this is how it is, and they know better, you never get that trust back. So you answer questions you can. If you can’t answer them, you let them know you can. And you find experts who can help you answer the questions that you don’t But.

You have to have knowledge. Knowledge, it’s not about book knowledge. It’s not about all the things that college brings or something like that because you have no practical knowledge at that point. And a lot of things are outdated that you’ll learn. It’s about how do you implement information into something that gives value back and accomplishes a goal. So, I mean, it takes time, you know.

You’re not going to know everything starting out. Doesn’t mean you can’t make money while you learn. And you should be making money while you learn. And you’re going to pay some money out before you make money. Or you’re going to give up a lot of time and you’re going to learn slower. I mean, if I invest in it, it’s going to happen faster. But I also need to have some expectations for what I’m getting for what I spend. Meaning, doesn’t mean that I make money for it, but I should gain knowledge.

Christian (26:13.613)
Mm.

Michael Saragusa (26:20.004)
or I should get money and I gotta seek the knowledge. But I gotta have a return on whatever it is that I give. So it takes time. People have no patience anymore. Everybody has very short attention spans. It’s getting worse and worse, not better. Because we’re being served information from people that aren’t qualified to provide that information now, there’s too much information available.

Christian (26:49.868)
much.

Michael Saragusa (26:49.901)
and only a small percentage of it is valuable. And you gotta have some knowledge of your own and you gotta be able to be honest with yourself that not everything is true.

Who am I getting my information from? How does that apply to either me or my projects or the people that I’m dealing with? And less is more. You can overwhelm people with, don’t try to impress people with what you know. Apply what you know towards something that’s gonna accomplish something and let them know that’s what you know. I know how to apply this to make that change happen.

Christian (27:33.815)
could not agree more. That really is everything. I’ve added the less and more model to my life years ago because at first, before, I wanted things just almost instantaneously, right? I just wanted things so fast and I realized I already had everything I right in front of me, right? And I think if more people were just willing to receive that, it would just catapult their success almost immediately.

in every area of their life, right? It’s just by doing that. So I couldn’t agree anymore. Right. Me too.

Michael Saragusa (28:07.95)
Yes, simplify things, don’t make them hard. I hate hard. Hard is hard. The same thing can be done since…

Christian (28:14.882)
Right.

Christian (28:18.605)
But you can choose your horror too, Exactly.

Michael Saragusa (28:21.517)
Yeah, if you’re do something hard, better be, you better have a really big payout at the end of it. And you better have some sort of guarantees that it’s gonna happen. Because otherwise you’re just spending, I always coordinate what is my time worth? And where do I need to spend that time to get the value back for what I’m gonna spend my time

Christian (28:26.381)
Yeah.

Right.

Christian (28:44.141)
That’s amazing. That is amazing. Michael, I wish we had an honestly an hour together, but unfortunately we’re running out of time. guys, thank you so much for joining us today. Michael, I’m gonna pass this over to you now though. If anyone wants to learn more about you, currently what you’re working on, I know you have a lot of different things going on. You could spend some time to talk about that and then where can people find you as well?

Michael Saragusa (29:12.149)
I’m going to just provide my old email. So I have a business one that once I develop business relationships with people or long-term relationships that they’ll go into, I’m going to give an old business one that I had. If anybody wants to speak to me further, that’s probably the best way to contact me. And that’s going to be Synergy, S is in Sam, Y-N-E-R-G-Y.

C as in Charlie, D as in David, G as in George, at aol.com. And if that doesn’t age me, I don’t know what does. So, S-Y-N-E-R-G-Y-C-D-G at aol.com. I love to teach. Honestly, if there was any money in it, that’s what I would have been, probably was a teacher. So I just utilize and take advantage of.

Christian (29:48.159)
Yeah.

Michael Saragusa (30:08.428)
That’s what I try to do through every transaction or through every interaction that I have with people is just either learn or educate.

Christian (30:17.389)
Well, I definitely felt that from you, Michael, from me.

Michael Saragusa (30:18.966)
then the money comes from what you create from that.

Christian (30:21.985)
Right, I definitely feel like I felt that from you and I’m sure, no, I said, I definitely feel like I felt that from you and I’m sure our audience is exactly gonna feel the same thing. I learned so much from you and I know they’re gonna learn so much from you as well from this and I really, really enjoyed our conversation today, thoroughly. So, no, of course, awesome.

Michael Saragusa (30:24.652)
I’m sorry.

Michael Saragusa (30:40.95)
Yeah, I appreciate it, Christian. Well, good luck to everybody. Hopefully it was useful. There’s a lot more. I mean, just continue your education. You never stop. I learned something new every day. It’s not going to stop. And there’s going to be bumps in the road. Be prepared for those and figure out how to remove those as quickly as possible. Anybody thinks that making a lot of money is easy?

is mistaken. So there’s nobody with a lot of money that hasn’t worked hard to get what they have.

Christian (31:14.295)
There is no easy path.

Christian (31:19.757)
That so true. That is so true. Michael, I love it. Awesome, guys. Well, I hope everyone enjoyed today’s show. And as always, we’ll see you on the next episode. Take care, everybody.

Michael Saragusa (31:31.371)
Thanks Chris.